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Coalition Letter Opposing the Marketplace Fairness Act

FreedomWorks has signed onto the following "Memo for the Movement", drafted by the Conservative Action Project, in opposition to the Marketplace Fairness Act, S. 743

Memo for the Movement: Congress Must Reject the Internet Sales Tax

Current Event:

On April 25, the U.S. Senate passed a key procedural vote to consider S. 743 - the so-called Marketplace Fairness Act - nearly ensuring passage. The bill expands the authority of individual states to cover out-of-state retailers, allowing them to force those retailers to collect sales taxes for them. This is a dangerous extension of state power, violating core principles of federalism. At the same time, it subjects consumers, businesses, and entrepreneurs to thousands of state and local tax regimes. With Senate passage imminent, the House must reject this misguided bill.

Action:

House Speaker John Boehner and Majority Leader Eric Cantor should not bring the Senate-passed bill directly to the floor.

Conservatives should reject any bill that expands the authority of out-of-state governments to regulate businesses with regard to online taxation.

Issue in Brief:

The 1992 Supreme Court decision, Quill Corporation v. North Dakota, bars states from requiring a retailer to collect sales taxes on its behalf, unless that retailer has a physical presence in the taxing state.

For example, a company whose workforce and warehouses are in New Hampshire, and which has no contacts with Illinois other than taking remote sales orders over the Internet cannot be required by the state of Illinois to collect sales taxes from customers living in Illinois.

Under the Marketplace Fairness Act, the Quill standard would be eliminated, allowing states that meet certain minimal streamlining standards to require retailers in all states to collect taxes for them.

As a result, retailers would be subject to laws imposed by states with which they have no direct connection, and in whose political system they have no voice. It is regulation without representation, allowing politicians to raise revenue, without fear of a public backlash. The result would be added costs for retailers and American consumers, directly through the sales taxes imposed, but also through the added burden of collecting the taxes for the 9,600 separate taxing jurisdictions in the U.S., each with its own unique definitions, holidays, and rates. It is also unfair to require online businesses to collect and remit sales taxes from all their customers based on their residence but not to require brick-and-mortar businesses to do the same. No such requirement should exist for any type of business.

A Congressional Research Service (CRS) report suggests the compliance burden associated with the bill would force businesses to set up shop outside of the United States, leading Sen. Ron Wyden (D-OR) to call the proposal the "Shop China Bill."

Rather than pass this misguided legislation, Congress should pursue alternatives that encourage tax competition and preserve the American standard of geographical limits to tax authority. As Rep. Jim Bridenstine (R-OK) said about the bill, "Taxes must be simplified not made more complex, reduced not expanded." We agree.

It would serve the low information voter to know these are unworkable, Marxist economy - destroying taxes. They are not paying down national debt, they expanding obscenely, needlessly to derail the free market economy.

July 21, 2008 Dear President Bush: Like all Americans, we are deeply concerned about the crisis in our financial markets. This is why we urge you to stand by your earlier statement and veto any bill that creates an “affordable housing trust fund” that would divert funds from the revenues of federal housing entities to at best, repetitive, and at worst, dubious purposes

Download a .pdf of the letter April 22, 2008 Dear Senator, As the Senate Commerce Committee prepares to hold its hearing on the “Future of the Internet,” we, the undersigned organizations, on behalf of our millions of members and supporters, encourage you to support the free market principles that have enabled the Internet to become one of the most successful innovations in history.

AN OPEN LETTER TO THE U.S. SENATE AND HOUSE OF REPRESENTATIVES (download .pdf version) Despite several years of consistently strong U.S. economic performance, many Americans today feel very insecure about the future of our economy. This economic anxiety is driven by rising personal debt;ever-increasing costs of health care, energy, education, and mortgages; and rising state and local taxes.

Download the .pdf of the letter with signatures Dear House Leaders, On behalf of the undersigned organizations representing hundreds of thousands of taxpayers, small businesses, shareholders, consumers and senior citizens, we strongly urge you and your colleagues to reverse the increasingly dangerous direction that the 110th Congress is taking with punitive energy policies that would punish the economy by raising taxes, raising energy prices and driving a death nail into domestic energy production.

Download the .pdf of the full letter with signatures July 25, 2007 The Honorable James M. InhofeUnited States Senator453 Russell Senate Office BuildingWashington, DC 20510 Dear Senator Inhofe: On behalf of our organizations, we are writing to support your contention that Congressional authorizing committees are an integral part of the effort to exercise discipline over out-of-control earmarking in appropriations bills.

To: Members of the House Agriculture Committee We, as representatives of consumer, taxpayer, public policy, and humanitarian groups, are writing to express our opposition to the Sugar Program in the 2007 Farm Bill – Chairman’s Mark.

View the letter as a .pdf Washington, D. C. 14th June 2007Dear Senator: The undersigned organizations are writing to share our concerns about S. 1419, the Renewable Fuels, Consumer Protection, and Energy Efficiency Act of 2007, sponsored by Sen. Majority Leader Harry Reid (D-NV). This bill should be titled the Making Energy Less Affordable Act.View the letter as a .pdf Washington, D. C. 14th June 2007Dear Senator:

Download the .pdf of the signed letter The Honorable Max BaucusU.S. SenateWashington, DC 20510 The Honorable Charles GrassleyU.S. SenateWashington, DC 20510 Dear Senators: On behalf of the millions of taxpayers, small businesses, families, senior citizens andshareholders, we strongly urge you to work and vote against any tobacco tax increase for reauthorization of the State Children’s Health Insurance Program (S-CHIP).